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United SGD Beats Peers With Perpetual Bond

United SGD Fund with AUM of S$435 million, managed by UOB Asset Management Ltd with AUM of $15.5 billion, a unit of United Overseas Bank Ltd, beats most peers with return of 5.1% as of 2012-08-29 by buying perpetual bonds and investing 70% of its money overseas as rates on bank deposits and sovereign yields approach zero.

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Gross Cuts Emerging Debt in PIMCO Total Return Fund

PIMCO’s Bill Gross, the Bond King who manages the world’s biggest bond fund cut holding of his emerging-market debt to a two-year low from 10% in March to 7%, a 2-year low as International Monetary Fund says growth in emerging economies will slow from 6.2% in 2011 to 5.7% in 2012.

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Michael Hasenstab Bond Investment Strategy 2012

Michael Hasenstab, who oversees more than $150 billion of global fixed-income assets at Franklin Templeton Investments, said he would prefer to gain exposure to China indirectly though Korean, Singaporean and Malaysian bonds until Asia’s largest economy opens up its capital account.  But he likes Hungarian government bonds because of “pretty significant yields” and “in the case of Hungary you are paid to wait”.

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Asian Bonds

Asian bonds outperformed Asian equities!  Using JP Morgan Asia Credit Index as the benchmark, Asian bonds have rose 40.4% in USD terms during the 2007-11 period, while Asian equities (using MSCI Asia ex-Japan as the benchmark) rose only 14.5 per cent over the same period.  In SGD term, after adjusted for 18.6% appreciation of SGD against USD over the last five years, Asian bonds delivered annualised return of 3.5% versus annualised loss of 0.7%.

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PIMCO Total Return Bond update 1Q 2012

Bill Gross, who manage the world’s biggest bond fund of $252.4 billion Total Return Fund, at Pacific Investment Management Co (PIMCO), cut US government and T-bill from 37% to 32%.  Meanwhile, he increased the holdings of mortgages from 52% to 53%, the highest since June 2009.  He maintained 10% exposure in emerging market debt and cut the bonds of non-U.S. developed nations from 7% to 6%.

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